What are rights and obligations of parties to transit service contracts in Viet Nam?

Transit of goods help facilitate the transportation and circulation of goods between countries. Vietnamese law currently has specific provisions on transit of goods. So what are rights and obligations of parties transit service contracts? Join Lawyer X to find out about this issue through the following situation: “Hi lawyer, I have a Malaysian friend who wants to transport goods through Laos, this transportation requires transit of goods at Vietnam. I intend to help my friend with a company specializing in transit of goods services, can you provide me what rights and obligations of parties are when entering into transit of goods service contract? Thanks for answering me! “

Legal grounds

2005 Commercial law

What is transit of goods? What are goods transit services?

Transit of goods means the transportation of goods owned by foreign organizations or individuals through the Vietnamese territory, including transshipment, portage, warehousing, shipment separation or alteration of modes of transportation or other jobs performed in the course of transit.

Goods transit services mean commercial activities whereby traders carry out the transit of goods under the ownership of foreign organizations or individuals through the Vietnamese territory for remunerations. Traders providing transit services must be enterprises with registrations of business of providing transportation services or logistic services according to Article 234 of Commercial law

– All goods owned by foreign organizations and individuals are allowed to be transited through the Vietnamese territory and subject only to customs clearance at import border gates and export border gates according to the provisions of law, except for the following cases:

 + Goods are weapons, ammunitions, explosive materials and other type of highly dangerous goods, unless they are permitted by the Prime Minister;

+ Goods are banned from business, export or import, which shall be allowed to be transited through the Vietnamese territory only when so permitted by the Trade Minister.

+ Goods in transit when being exported from, and means of transport carrying goods in transit when leaving, the Vietnamese territory must be the goods or means of transport which have previously entered the Vietnamese territory.

+ Foreign organizations or individuals that wish to transit their goods through the Vietnamese territory must hire Vietnamese traders providing transit services to do so, except for cases mentioned in Clause 4 of this Article.

+ The transit of goods through the Vietnamese territory by foreign organizations and individuals themselves or by hired foreign traders must comply with treaties to which the Socialist Republic of Vietnam is a contracting party and the provisions of Vietnamese law on exit, entry and transport.

Some notes when transiting goods

*Routes for transit

– Goods shall only be transited through international border-gates and on certain routes in the Vietnamese territory.

– On the basis of treaties to which the Socialist Republic of Vietnam is a contracting party, the Transport Minister shall specify routes on which the transportation of goods in transit is allowed.

– In the course of transit, any change of routes on which the transportation of goods in transit is allowed must be consented by the Transport Minister.

*Transit by airways

Transit by airways shall be carried out in accordance with treaties on aviation to which the Socialist Republic of Vietnam is a contracting party.

*Supervision of goods in transit

Goods in transit through the Vietnamese territory shall be subject to the supervision by Vietnamese customs authorities throughout the course of transit.

 *Transit duration

– The maximum duration of transit through the Vietnamese territory shall be thirty days from the date of completion of customs procedures at import border-gates, except where goods are warehoused in Vietnam or damaged or lost in the course of transit.

– Where goods are warehoused in Vietnam or damaged or lost in duration of transit and require more time for warehousing, remedying such damage or loss, the transit duration may be prolonged according to the amount of time required for such jobs and with approval of customs authorities where transit procedures are carried out; in cases where goods are transited under permits of the Trade Minister, approval of the Trade Minister is required.

– During the period of warehousing or remedying damage and loss, transit goods and means of transport carrying transit goods must still be subject to supervision by Vietnamese customs authorities.

*Goods in transit consumed in Vietnam

 – Goods in transit defined at Points a and b, Clause 1, Article 242 of commercial law shall not be permitted for consumption in Vietnam

– Except for cases mentioned above, goods in transit shall be permitted for consumption in Vietnam only when it is so approved in writing by the Trade Minister.

– The consumption of transit goods in Vietnam must comply with the provisions of Vietnamese law on import of goods, taxes, charges, fees and other financial obligations.

*Prohibited acts during transit

– To pay transit remunerations in transit goods.

– To illegally consume goods in transit or means of transport carrying goods in transit.

Rights and obligations of parties to transit service contracts

Transit service contracts must be made in writing or in other forms of equivalent legal validity.

*Rights and obligations of transit service hirers

– Unless otherwise agreed, transit service hirers shall have the following rights:

 + To request transit service providers to receive goods at import border-gates at the agreed time;

 + To request transit service providers to promptly notify the conditions of goods in the course of transit through the Vietnamese territory;

+ To request transit service providers to carry out all necessary procedures to limit damage or loss of goods in transit in the course of transit through the Vietnamese territory.

 – Unless otherwise agreed, transit service hirers shall have the following obligations:

+ To deliver goods to import border-gates of Vietnam on time as agreed;

+ To supply transit service providers with sufficient information on the goods;

+ To supply sufficient documents necessary for transit service providers to carry out procedures for import or transportation in the Vietnamese territory and the export procedures; d/ To pay transit remunerations and other reasonable expenses to transit service providers.

*Rights and obligations of transit service providers

Unless otherwise agreed, transit service providers shall have the following rights:

 – To request transit service hirers to deliver goods to import border-gates of Vietnam on time as agreed;

– To request transit service hirers to supply sufficient necessary information on the goods;

– To request transit service hirers to supply sufficient necessary documents for carrying out procedures for import and transportation in the Vietnamese territory and export procedures;

– To receive transit remunerations and other reasonable expenses.

 Unless otherwise agreed, transit service providers shall have the following obligations:

– To receive the goods at import border-gates at the agreed time;

– To carry out procedures to import and export the goods in transit into and out of the Vietnamese territory;

– To be responsible for goods in transit in the course of transit through the Vietnamese territory;

– To perform necessary jobs to minimize loss and/or damage to the goods in transit in the course of transit through the Vietnamese territory;

– To pay assorted fees and charges and other financial obligations applicable to goods in transit as provided for by Vietnamese law;

– To cooperate with competent state agencies of Vietnam in dealing with matters related to the goods in transit.

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